Friend's looking for some investment property

Toggle sidebar Toggle sidebar
geno

geno

Lifer
Dec 26, 1999
25,074
4
0
Hey guys,
A good friend of mine is looking to buy some land, build a house, and sell it off within a year in hopes of making some money. He was referred to a site in which he can invest with a building development that's building houses in Sarasota. Think he should go this way? The site says they'll take a small percentage in exchange for providing some framework for the whole process. Now, of course, you'd have to check to make sure everything is legit. I'm looking for some advice though, do you generally think this is a good idea? Safe? If not, what would you recommend doing, just buying your own property and selling it on your own/through your own real estate angency?

Well, here's the site, there's a lot of info on the process:
http://www.greatinvestmentreturns.com/

Looking forward to getting some advice from some people who know their stuff about real estate ... thanks so much!

:)
 
geno

geno

Lifer
Dec 26, 1999
25,074
4
0
Sorry my friend's got his heart set on Florida :) thanks though!
 
F

flot

Diamond Member
Feb 24, 2000
3,197
0
0
That site is a little shady. Basically it's just a realtor encouraging you to risk lots of your money and use him in the process.

Buying preconstruction houses speculatively is an iffy endeavor. It can work out great, or it can work out not at all. It just depends. Letting someone else do the legwork for you though, that's what I call dangerous.

I wouldn't get involved in something like the above - your friend needs to do lots of research on his own and figure out what he wants. If he ever gets to the point where he has actually found a house he wants to buy (without the help of another realtor) then shoot me a pm, my parents are realtors in sarasota county and would represent him fairly / safely from a distance. They are typically sellers agents but if your friend happened to know exactly what he wanted, they might come in handy.
 
rhino56

rhino56

Platinum Member
Oct 6, 2004
2,325
1
0
its ok, i talked with another geno online about a year ago. he was thinking of getting an high performance exhaust on his truck.
maybe you should think about a truck anyways? they are a blast in the mud.
 
geno

geno

Lifer
Dec 26, 1999
25,074
4
0
Originally posted by: flot
That site is a little shady. Basically it's just a realtor encouraging you to risk lots of your money and use him in the process.

Buying preconstruction houses speculatively is an iffy endeavor. It can work out great, or it can work out not at all. It just depends. Letting someone else do the legwork for you though, that's what I call dangerous.

I wouldn't get involved in something like the above - your friend needs to do lots of research on his own and figure out what he wants. If he ever gets to the point where he has actually found a house he wants to buy (without the help of another realtor) then shoot me a pm, my parents are realtors in sarasota county and would represent him fairly / safely from a distance. They are typically sellers agents but if your friend happened to know exactly what he wanted, they might come in handy.
Click to expand...

Hey thanks a bunch! I'll let him know, I told him to be careful obviously, but I don't think he's entirely sure of how to go about researching this place. My mother is an agent with Century 21 and she says he'd be better off just buying land on his own and building a house, then flip it through a local realtor. We'll see what happens. Again, thanks a lot flot!

 
jlee

jlee

Lifer
Sep 12, 2001
48,518
223
106
We might be selling our house in Brooker, FL...does he want it? :D
 
jlee

jlee

Lifer
Sep 12, 2001
48,518
223
106
Originally posted by: geno
Originally posted by: CadetLee
We might be selling our house in Brooker, FL...does he want it? :D
Click to expand...

How much? Details? :D
Click to expand...

2.4 acres, IIRC...1.5 story, aboveground pool, front deck...

Not sure how much yet, and my mother wants to start a business so we can afford to move in town again -- we're thinking about marketing this place as a vacation home or something..it's quiet and out of the way..you can target shoot in the backyard, and nobody cares..but you're only ~20 minutes from Gainesville =)

How much is he looking to spend, and when does he want to buy?

If you/he are/is really serious and wants more info, email me (cdtlee84 (at) yahoo.com) and I'll talk to my mother about it & see what she says/thinks/wants. (I still live at home..cheaper than moving out :p)
 

If he wants to flip properties in hopes of making a profit he should look into HUD homes, foreclosures, auctions and estate sales.
The hud homes usually need work to bring them up to snuff.

He might want to keep in mind that new build houses tend to depreciate immediatly below the cost to build them. Not very easy to make money unless you have very motivated buyers an sellers.
 
O

Ornery

Lifer
Oct 9, 1999
20,022
17
81
Think he should go this way?

No.
  • ...Already quite a challenge at home, even a bigger venture in Florida, a country you most of the time don?t know, neither do you speak the language and are you familiar with procedures and habits in this country...
Sounds like the biggest crock I ever heard!

How much work does he plan on doing himself? Is he moving there? The land in the best locations has already been developed. Developers are snatching up what's left. Might be easier to renovate existing homes. With all the termites down there, you may find quite a few houses that need to be razed and replaced. Better chance of getting a great location that way, too.
 
F

flot

Diamond Member
Feb 24, 2000
3,197
0
0
Originally posted by: geno

Hey thanks a bunch! I'll let him know, I told him to be careful obviously, but I don't think he's entirely sure of how to go about researching this place. My mother is an agent with Century 21 and she says he'd be better off just buying land on his own and building a house, then flip it through a local realtor. We'll see what happens. Again, thanks a lot flot!
Click to expand...

Not to disparage your mom - but the buying land and building a house thing is also very dependant on the particular market - which can vary drastically from state to state and just as much from city to city. (For instance, here in Fort Lauderdale, we are literally out of vacant land)

If you want crazy - a house down the street from mine sold 9 months ago for $249,000 and last week they just listed it for $365,000. The only "trick" to investing in real estate is that you have to be able to identify the up-and-coming areas, be able to suffer through owning the house in the not-so-great time and then sell it after the neighborhood has taken off.

IMO the problem with investing in preconstruction is that you never know when the market will accidentally be saturated. For instance, I had a chance to buy into a condo as one of the first preconstruction purchasers, but the project was going to be ongoing for 2+ years. So for that whole 2 year period, people would have had the option to buy a brand new unit customized as they wanted it. It just wasn't worth the risk to me that I'd be stuck with it for that time period... I *assume* the prices kept getting raised, but even so I figured I'd be better off buying a house with actual land.

 
D

dman

Diamond Member
Nov 2, 1999
9,110
0
76
In S.FL it's a pretty common thing for buyers to get in on communities when they have preconstruction prices and then turnaround and sell for a profit when the communities are near sold out and/or folks dont' want to wait for a home to be built.

However there are many ways this could fail, a few off the top of my head:

1) Demand drops (homes now available for less in same neighborhood or elsewhere)
2) Builder's generally build 'spec' homes to take care of the folks who don't want to wait, they use them as models if needed but offer them up for sale if needed.
3) Interest rates keep rising, folks can't afford to buy houses that are rising in price... (goes back to #1)
4) Hurricane season hits, you can't sell the house quickly because insurance is hard to find
4a) you get stuck making payments on the house because of any of the above
5) Other investers pull out and you can't afford to make payments

etc.etc.

It's risky. But, the demand in S.FL is extremely high right now so it's working out for many folks. I don't think Sarasota has the same appeal, but, it's likely also growing and, in fact, if it's cheaper there than it is here some folks may migrate that way driving prices there up.

Good luck to your friend.
 
C

cmdrmoocow

Golden Member
Jul 22, 2004
1,503
0
0
Palm Coast - my hometown. Was the fastest growing county in the entire US for a few years, not sure if it still is. If you're looking for investment property, take a look there.

The value of the land that my parent's have has about tripled its value since 97.... 7 years?
 
D

DrumminBoy

Golden Member
Mar 10, 2002
1,995
0
0
On a flight down to Florida in December I overheard a couple guys talking about their properties in Sarasota, and one of them basically said he buys a house, lives in it for a year, then sells it, and he's made alot of money doing it. Property prices are incredibly high, and they keep going higher...just wait 15-20 years as the baby-boomers start to migrate down, its going to be nuts.
 
mcveigh

mcveigh

Diamond Member
Dec 20, 2000
6,457
6
81
sarasota used to have the highest per capita income in the US at one time. I live about an hour north. My uncle lives there. it is a very wealthy snobby community.
 
O

Ornery

Lifer
Oct 9, 1999
20,022
17
81
...he buys a house, lives in it for a year, then sells it, and he's made alot of money doing it.

You left out the part about buying a replacement, which had been appreciating during the same year he was living in the old one. He skates on property gains tax, but that's about it, unless he's doing renovations while living there.
 
geno

geno

Lifer
Dec 26, 1999
25,074
4
0
Originally posted by: Ornery
Think he should go this way?

No.
  • ...Already quite a challenge at home, even a bigger venture in Florida, a country you most of the time don?t know, neither do you speak the language and are you familiar with procedures and habits in this country...
Sounds like the biggest crock I ever heard!

How much work does he plan on doing himself? Is he moving there? The land in the best locations has already been developed. Developers are snatching up what's left. Might be easier to renovate existing homes. With all the termites down there, you may find quite a few houses that need to be razed and replaced. Better chance of getting a great location that way, too.
Click to expand...

He doesn't know much about repair/house work just yet, he'd be a first time homeowner. He's planning on moving there, but was hoping to flip a home before he moved down there permanently...


Keep the posts coming! He'll be very happy to see some input on this situation since he's very inexperienced, but hoping to get educated very soon. :)

Thanks a ton!
 
You must log in or register to reply here.

TRENDING THREADS

COMPANY
RESOURCES
FOLLOW
Top Bottom